As games shift from entertainment you pay for to entertainment that pays you, regulated payment apps will play a big role in connecting players with games.

I believe that online gaming, one of the world’s biggest and fastest-growing industries, is about to change completely. Thanks to Web3, games are going to transform from entertainment you pay for into entertainment that pays you (if you play your cards right).

A lot has been written about how positive this is from a gamer/consumer perspective. After all, Web2 games are a one-way street financially. Modern games try to get players to spend as much as possible on in-game transactions, with most of the money flowing to the game developer. For most of these games, the major app stores take a generous cut of everything. Web3 games are difficult because they are built on user-owned economies, where gaming communities run on decentralized governance principles can decide to reward players for their time, attention, and skillful play through assets like in-game tokens and NFTs.

That’s all great, but taking a step back, another really positive aspect of Web3 is how much it is going to change the distribution model for games. As mentioned above, mobile app stores operating as walled gardens have dominated this part of the industry during the Web2 era. However, I’m going to share why I think that can and must change in the Web3 era, in a way that financially benefits players in their everyday lives.

Distribution model must change

In Web3 games, playable characters and in-game items are often tokenized as NFTs. Web3 games also allow users to amass both governance tokens, that provide input on community decisions and staking rewards, as well as tokens that act as the in-game currency. Move-to-earn games, a growing subcategory, add an additional twist in which game rewards, with real money value, are tied to movement activity tracked by your smartphone.

When it comes down to it, mass adoption of Web3 games will depend on whether players who amass these digital assets see a clear path to real-world gains. It needs to be simple and painless to convert in-game assets to digital cash in your local-currency wallet.

The traditional Web2 game distribution model was not designed to work this way. That means the development of Web3 games is a significant opportunity to disrupt that model. Given the notoriously high ‘take rate’ of the entrenched mobile app store platforms, that would be a welcome development for many in the gaming industry.

Web3 games are already showing that they can achieve impressive growth outside of the mainstream distribution channels. Axie Infinity, for example, built up a base of 1.6 million active daily players at a time when it was not available in either major app store – it couldn’t be downloaded on iOS and could be used on an Android device only through direct APK download.

Normally, it would be near impossible for a game to thrive outside of the major app store ecosystems – and the Web3 games market remains a very small proportion of mobile gaming globally. But the “to-earn” characteristics of these games, and the opportunities to earn NFTs and tokens, provide enough incentive for players to tackle slightly more complex game installation processes.

To reach true mass adoption, however, the Web3 gaming world needs a new distribution model that’s as simple and turn-key as the major Web2 app stores.

Regulation and compliance will be key

Web3 game distribution is a big opportunity, but it’s not a simple task. That’s why we don’t see existing major Web2 platforms trying to solve these problems. From a regulatory perspective, operating a platform that simply collects money from consumers and passes most of it to game developers is fairly easy to do.

When money is flowing in both directions, because the players own the in-game economy, and can participate in the economic growth of the game, it’s a whole different story. Web3 game platforms need to make it just as easy for players to take money out of a game as to put money into it. The major Web2 app stores are not set up to do this, and they have little incentive to start.

As a platform, if you’re going to send money to users, especially in fiat, you need to be regulated. Specifically, you need to comply with Know Your Customer (KYC) regulations. There’s no getting around it. Compliance entails significant upfront investment, as well as close collaboration with regulators.

Of course, Web3’s ultimate success depends on talented game developers designing fun and immersive worlds to attract players – and sound in-game economics to reward them. But, equally, it will require builders with expertise in payments and transactions to roll up their sleeves and do the hard work of creating and running compliant crypto-to-fiat conversion services.

Local platforms will prosper

Everything about the Web3 world is decentralized. In contrast to the winner-take-all dynamics of Web2, which have fueled the creation of global big tech monopolies, users will have much more choice when deciding where to get their Web3 gaming experiences.

Because Web3 game distribution will be compliance-intensive, as detailed above, local platforms that are intimately familiar with their country’s regulatory rules and maintain close,     candid communication with the regulatory authorities themselves will be best positioned to offer smooth, seamless, and reliable services.

Web3 games are about user-owned economies and true digital ownership. That ownership is only meaningful if it can impact your day-to-day financial life, which means these games need to be closely linked with the services people use to manage their everyday payments. Ultimately, in the next generation of gaming, you might log in to acquire or play a new game not in your device’s app store or gaming center, but in your digital wallet app.

Wei Zhou is the Singapore-based CEO of, a fully regulated fiat and crypto mobile wallet provider in the Philippines. He and Joffre Capital led the buyout of earlier this year and recently completed a $30 million Series C financing led by Ribbit Capital. Wei also serves as a strategic adviser and key investor in Old Fashion Research (OFR), a blockchain investment fund founded in 2021 by former executives and investment teams from Binance, where Wei once served as chief financial officer. Prior to Binance, Wei led the acquisition and served as the vice chairman of Grindr, a dating and social networking app for the LGBT community. Wei began his career at Goldman Sachs, and he graduated from Harvard University with a bachelor’s degree in economics and East Asian studies.

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